By Xiaolin Duan

The New Status Quo in the Diaoyu/Senkaku Islands Dispute?

In
the 1970s China made its first official territorial claims over the
Diaoyudao/Senkaku Islands, and since then the dispute has continuously affected
the China-Japanese relationship, and occasionally triggered diplomatic crises between
them, most of which were deescalated for the sake of their shared economic
interests. However, the arrest of a Chinese fishing boat captain in the disputed
waters by the Japanese Coast Guard in 2010, and then Japan’s efforts to
nationalize the Islands made their bilateral relationship reach new lows.

The
Chinese side vowed to maintain its routine patrols in the disputed waters to
strengthen its sovereignty claims, while Japan responded with a firm
determination to conduct its military buildups, enhance its defense cooperation
with the Americans, and tried to build the Asian Arc of Democracy allegedly
aimed at forming a balancing coalition against China.

What
is more, Chinese assertiveness in the dispute alerted the United States and
other players. America is worried about how China is going to project its
expanding economic and military strengths. It sees China’s rising naval
presence in the West Pacific and beyond as a test of its determination to
maintain the regional status quo. If it does not respond with firm action,
Washington believes, China may further challenge the US’ strategic interests.
Beijing’s assertiveness hence contributed to the formation of the US’
rebalancing strategy, starting a strategic shift of the US’ China policy to a
containment-oriented strategy.

The
Turning Point

In
November 2014, Chinese State Councilor Yang Jiechi and Japanese national
security adviser Shotaro Yachi reached a four-point consensus regarding the Sino-Japanese relationship. The fourth point stated: “The two
sides have acknowledged that different positions exist between them regarding
the tensions which have emerged in recent years over the Diaoyu/Senkaku Islands
and some waters in the East China Sea, and agreed to prevent the situation from
aggravating through dialogue and consultation and establish crisis management
mechanisms to avoid contingencies.”

Although
the four-point consensus was not legally-binding, in the two Xi-Abe meetings in
Beijing’s and Jakarta’s APEC summits in 2014 and 2015 respectively, the two
countries reaffirmed their commitment to respecting the four-point consensus,
making their rapprochement possible.

During
Chinese Premier Li Keqiang’s May
2018 visit to Japan, the two countries also restored their dialogue
in defense and regional security, political party and congressional exchanges,
and free trade agreement negotiations. Specific achievements included: granting
Japan a RMB Qualified Foreign Institutional Investors (RQFII) quota of RMB 200
billion (about USD 31.36 billion), a currency swap deal, building a
cross-agency work mechanism for private sector cooperation, along with other
deals in film industry and rare species protection.

The
visit could have brought the two countries to a new era of friendship and
cooperation after a decade of ups and downs. During his visit, Premier Li was
received with warm and high-profile hospitality by Japanese Prime Minister
Shinzo Abe. Xinhuawrote, “Chinese premier’s visit opens new chapter for China-Japan economic,
trade ties.” Japanese Chief Cabinet Secretary Yoshihide Suga said at a press
conference: “It [the meeting] will advance bilateral amicable relations to the
next stage through cooperation in every field.”

The
current status quo is a coordinated contestation for disputed territories
between China and Japan.

The
political reconciliation has laid the foundation for a possible
compromise between both countries on sensitive issues including the
Diaoyu/Senkaku Islands dispute. The Defense Departments of both countries
agreed to start operating a maritime
and air liaison mechanism that aims at averting accidental clashes
and avoiding military misunderstanding and misjudgment. In the negotiation
process, Japan proposed excluding the territorial waters and airspace of Japan —
including the Diaoyu/Senkaku Islands which are de facto controlled by
Japan — under the liaison mechanism. Beijing worried that by excluding the
territorial waters in the mechanism, it would appear to recognize Tokyo’s
sovereignty over the disputed islands. Ultimately, the two countries refrained
from specifying the geographical coverage of the liaison mechanism “in an
apparent attempt to avoid further complicating the dispute.” The new mechanism was
welcomed by the international community and will help both sides avoid
miscommunication and misjudgment.

New
Status Quo?

Project
2049, a US-based think tank, released a research report on China’s
Diaoyu/Senkaku strategy in March 2018. The widely-cited report addressed the catastrophic
risk of the dispute in the future, arguing that China may attempt to
seize the Islands in a “short, sharp war” between 2020 and 2030. It highlighted
the political importance of the territories for the Chinese Communist Party,
the development of China’s strategic missile and naval strengths and
comprehensive power, and its military and paramilitary doctrines.

Project
2049’s predictions are biased and overly pessimistic. A new status quo is already
in formation despite the possibly continuous albeit coordinated low-intensity
tensions that will persist into the future. Since 2016, China’s naval presence
in the disputed waters has followed certain routine procedures and has become
more predictable and professional, while the Japanese Coast Guard has also
responded with self-restraint. With the new dialogue and crisis management
mechanisms in effect, the risk of militarized conflict is temporarily limited.

Although
Beijing has vowed to defend its territorial integrity, there is little
possibility of military adventurism from Beijing in the dispute. Its economic
agenda still prevails over other foreign policy objectives including the
territorial issues; Beijing remains cautious about seizing lost territories
that are under effective control by foreign countries in both the South China
Sea and East China Sea.

On
the strategic level, the US-Japan alliance has been in transition ever since
President Donald Trump took office. His “American first” policy may push China
and Japan to manage their differences and develop a stronger partnership in
economics and regional politics. The strategic uncertainty and their shared
interests may generate stronger incentives for them to manage the dispute.

The
current status quo is a coordinated contestation for disputed territories
between China and Japan. China maintains its routine presence in the disputed
waters, while Japan has responded with close but professional naval and aerial
surveillance. China has promised no official landings on the Islands, while
Japan has promised not to utilize the Islands either for economic or military
purposes. Furthermore, both sides have restrained their nationalist activists
from landing on the Islands or mobilizing the public via other means.

A
new status quo based on the coordinated contestation for disputed territories
hence remains possible. However, such a status quo will be vulnerable to
political hurdles and social distrust, which will continuously test the political
wisdom of China’s and Japan’s leaders.